Suburban filed a general rate case application with the CPUC on January 3, 2017, requesting authority to increase rates for water service by:

2018: $11,020,932 (15.25%)

2019: $6,148,017 (7.38%)

2020: $5,543,562 (6.20%)

3-Year Cumulative Total = $22.7 million (28.83%)

Suburban is requesting (among other things) an additional:

$84 million in Capital Additions (2017-2019)

$9.9 million in Payroll Expenses

$42.1 million in Operating Expenses except Payroll Expenses

$6.0 million in Parent Company and Utility Group Expenses

$9.4 million in Taxes

ORA's Position

ORA performed an in-depth review of Suburban's application and recommends the following revenue increases:

2018: $509,209 or 0.64%

2019: $3,114,447 or 3.92%

2020: $2,588,333 or 3.12%

3-Year Cumulative Total= 6.2 million (7.68%)

Suburban over-estimated the revenue needed for capital improvement projects, operating expenses, taxes, and parent company and utility group expenses assigned to Suburban.

A smaller rate increase is appropriate because of better than average rainfall this year and the recent Governor's Order lifting mandatory drought restrictions. As a result of these events, customers will likely increase their water consumption, and Suburban will see higher revenues than it estimates. Higher revenues will offset the revenue increase needed to reliably serve customers.

Suburban's request of $84 million for capital projects over the next three years is unreasonable because Suburban's service areas are mostly built out and there has been little or no growth. A capital projects budget of $45 million over the same time period (a reduction of 46%) is more reasonable.